Flair Writing Industries (Flair), a key player in the writing instruments industry, made a notable entry into the Indian stock market today. Renowned for its development and manufacturing prowess, Flair secured a spot among the top three players in the sector.

Marking its debut on the BSE, the stock opened impressively at Rs.503 per share, showcasing a remarkable 65.46% premium compared to its initial public offering price of Rs.304 per share. Simultaneously, on the NSE, the stock commenced trading at Rs.501 per share, reflecting a solid 64.8% premium. Presently, the company commands a market capitalization of Rs.5,301 crore. The IPO's book-running lead managers were Nuvama Wealth Management Limited and Axis Capital Limited. Further overseeing the issue, Link Intime India Private Limited served as the registrar.

IPO Proceeds

The net proceeds from the IPO are earmarked for various strategic initiatives. These include establishing a state-of-the-art manufacturing facility dedicated to writing instruments in District Valsad, Gujarat (New Valsad Unit). Additionally, the funds will support the capital expenditure requirements of both the company and its subsidiary, FWEPL. Furthermore, the proceeds will cater to the working capital needs of the company and its subsidiaries, FWEPL and FCIPL. A portion of the funds will be allocated for the repayment or full prepayment of specific borrowings obtained by the company and its subsidiaries, FWEPL and FCIPL. Finally, the remaining proceeds will be utilized for general corporate purposes.

Company Overview

Flair specializes in crafting writing instruments tailored to the ever-evolving needs of today's dynamic market while maintaining global business and societal standards.

Renowned for its partnerships with key players in the writing industry, Flair boasts a portfolio encompassing multiple brands such as Flair, Hauser, Pierre Cardin, Flair Creative, Flair Houseware, and ZOOX. In FY23, the company achieved remarkable sales, totaling 1,303.60 million units of pens. Notably, 975.30 million units, constituting 74.82% of sales, were distributed domestically, while 328.30 million units, accounting for 25.18%, were exported globally.

In a strategic move towards diversification, Flair recently expanded its portfolio to include a range of houseware products. These encompass casseroles, bottles, storage containers, serving solutions, cleaning products, baskets, and paper bins. This diversification initiative was realized through one of its subsidiaries, FWEPL.

Details of Subscription

On the final day of the IPO window, November 24, 2023, the IPO witnessed remarkable interest, showcasing a subscription rate of 49.28 times—an impressive response compared to recent IPO listings. Notably, the retail category subscribed 13.73 times, while the QIB category achieved a substantial subscription rate of 122.02 times. Additionally, the NII category exhibited a strong subscription rate of 35.23 times.

The company successfully garnered Rs.177.90 crore from various anchor investors by allocating 58.51 lakh equity shares at Rs.304 per share. The lock-in period for these anchor investors extends until April 4, 2024.

The IPO was priced in the range of Rs.288 to Rs.304, featuring a face value of Rs.5 per share and a lot size of 49 shares. With a total IPO size of Rs.593 crore, the final share issue price was determined at Rs.304 per share.

Financials of the company

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The Bottom Line

Investors find themselves at a crossroads, weighing the decision to retain or sell their shares. For those eyeing immediate gains, the IPO has already delivered a commendable 65% return from its final issue price on the listing day, prompting some to contemplate exiting their positions.

However, investors with a greater risk appetite may find merit in holding onto their shares for the medium to long term. This strategic choice offers the potential for sustained benefits and growth over time, aligning with a more patient investment approach.

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